4.14.15 - Freeing Your Savings From Banks
Gold last traded at $1,192 an ounce. Silver at $16.16 an ounce.
STOCKS: U.S. stocks traded mixed on Tuesday amid economic weakness, dollar volatility and rising oil prices. "Stocks are priced for perfection in an imperfect world," reports Marketwatch. "To be sure, the money that central bankers have flooded the planet with has fought off a deflationary economic catastrophe. By employing 'inflation targeting' these central bankers believe that they can also create growth. They are wrong .... Stocks, from China to Germany to the U.S. are all priced now as if global growth were about to take off."
FED: The Federal Reserve is running out of injections to boost the U.S. economy and could use a "stress test" of its own, reports CNBC. "Over the past 6 ½ years, the Fed's two weapons of choice have been printing money, or more precisely, creating it digitally, to buy up various securities including U.S. Treasurys and mortgage-backed securities; and keeping its short-term target funds rate near zero." According to Ted Peters, a former member of the Philadelphia Fed board, "The Fed's really out of a lot of bullets here". Whether the Fed would be able to navigate the economy out of another crisis, he said, "really depends on what type of crisis occurs."
BANKS: As mentioned yesterday, authors Craig Smith and Lowell Ponte believe the government's next tax target may be your bank account. According to Smith and Ponte, "A precedent was set for seizing bank accounts under the 'bail in' doctrine in Cyprus, where people awoke one March 2013 morning to find their banks locked and ATM access to their accounts shut down. President Obama has embraced such bail ins."
"Now, we have a similar new legal precedent being set in Australia for taxing your bank accounts ... for your protection, of course. America might quickly adopt this, too. Get ready in the near future to pay the bank a fee, and the government a tax, just for the honor of having a high-risk bank account that pays you nothing," write Smith and Ponte.
"We were taught that thrift is good, but real thrift now means freeing your savings from today’s banks. Don’t Bank On It! and our newest free White Paper The Biggest Bank Heist In History! will show you how to escape the tax cage being built by politicians to snare you and your hard-earned money."
GOLD: Precious metal prices dipped early then rebounded as the dollar turned lower after U.S. retail sales and producer prices data came in weaker than expected. Near-term it appears the Fed is in the drivers seat, as the financial world awaits their decision on raising interest rates this year. Smith and Ponte do not see interest rates increasing until 2016, due to upcoming economic reports which will confirm jobs and GDP weakness. Such weakness could boost gold interest as investors seek the safest place to park their wealth for short and long-term wealth protection.
4.13.15 - Is Your Bank Account a Tax Target?
Gold last traded at $1,199 an ounce. Silver at $16.29 an ounce.
* New Scheme To Tax Bank Accounts
* 52% of Americans Shun Stocks
* When Recession = Recovery?
* Upstate NY The Next Detroit
BANKS: According to authors Craig Smith and Lowell Ponte, the government's next tax target may be your bank account. "Tax day, April 15, reminds us of just how overtaxed we have become, and how a circular cage of taxes on earning, spending, investing and saving is being created to snare us. A new political scheme to tax bank accounts, according to the Australian Financial Review, might be locked in place in Australian banks as soon as January 1, 2016. This could quickly be copied by other tax-hungry welfare states, including ours. This bank deposit tax will likely begin at a low percentage, to create a legal precedent, but it is expected to grow rapidly, as the income tax did in the United States." Last year Americans were shocked to read The New York Times investigation "Law Lets I.R.S. Seize Accounts on Suspicion, No Crime Required," using a law that lets government confiscate the bank accounts of those who deposit or withdraw even relatively small amounts of cash.
STOCKS: U.S. stocks gave up modest gains and turned mostly lower Monday as concerns about weak earnings reports, as well as looming interest-rate hikes, eroded investor confidence. Some analysts are now calling for a 10% stock market correction this month. Meanwhile, "Over Half Of Americans Aren't Investing In The Stock Market," reports Forbes. "The stock market, which gained 30% in 2013 and 11% in 2014, is up less than 1% this year. According to a new survey from Bankrate, some 52% of Americans say they don’t own any stocks, even as the market has enjoyed positive returns for the last six years and counting."
RECESSION: "Recessions Are Absolutely Beautiful, And Should Be Renamed 'Recovery'" writes John Tamny at Forbes. "Writing recently in the Wall Street Journal, Greg Ip, one of the Journal’s chief Fed watchers, comically suggested that the world’s foremost central bank “is getting what it wanted from six years of near-zero interest rates and trillions of dollars of bond buying: unemployment approaching levels often thought of as ‘full employment.’” Can Ip really believe this? Do the individuals who staff the Fed believe what is so plainly false? As explained in Don't Bank On It!, the U.S. has yet to get out of The Great Recession of 2008 thanks to the Fed.
TAXES: "Upstate New York is becoming Detroit with grass," reports Deseret News. "Binghamton, New York - once a powerhouse of industry - is now approaching Detroit in many economic measures, according to the U.S. Census. In Binghamton, more than 31 percent of city residents are at or below the federal poverty level compared to 38 percent in Detroit." Authors Craig Smith and Lowell Ponte warned about this in THE GREAT WITHDRAWAL: How the Progressives' 100-Year Debasement of America and the Dollar Ends saying, "Detroit was to be a workers' paradise, a symbol of Progressive success. Instead, it has become a symbol of Big Government failure, corruption, violence and decay. In 2013, after a great withdrawal of more than a million productive residents, once-great 'Debtroit' became the largest American city ever to declare bankruptcy." Today the residents of many high-tax cities and states such as New York, California and Illinois are voting with their feet by seeking to live in states with lower tax rates such as; Texas, Florida, North Carolina, Arizona and Georgia.
4.10.15 - Celebrating National Coin Week
Gold last traded at $1,204 an ounce. Silver at $16.38 an ounce.
* GE Exits ZIRP Banking World
* Free Marketeers Turn Liberal
* $20 Bill Shrinks To 3.3 Cents
* Gold Rises Despite Dollar Bounce
STOCKS: The Dow touched the 18,000 level again on Friday, despite the bleak outlook for first-quarter corporate earnings expected to fall as much as 5%. Meanwhile, General Electric has decided to get out of the banking business due to low interest rates. They announced today they are selling GE Capital to boost shareholders with a $50 billion share buyback. CNBC's Art Cashin says that in recent years trillions of dollar in stock buy backs have artificially boosted stocks prices and earnings ratios. Watch out!
FREE MARKET: Swiss America Chairman Craig Smith was a guest on Fox Business Thursday evening discussing why the last six years have been such a hostile environment for the free market - which is the bedrock of conservatism. Craig points out the Silicon Valley entrepreneurs who have grown tremendous wealth and achieved great success such as those from Google, Apple, Amazon, Facebook and Twitter, often turn against the very conservative principles that helped them built their empire by financially supporting liberal policies and candidates. The result is the public policy blunders like Dodd-Frank and Net Neutrality that have crippled U.S. business growth. "It is only a matter of time before these Progressive/Liberal policies are shown to be failures," says Smith.
2015 National Coin Week begins in April. This year marks the American Numismatic Association's 100th anniversary of the 1915 Panama-Pacific International Exposition in San Francisco. To celebrate, Craig Smith shares a series of ten two-minute stories entitled The History of Your Money. The goal is to help inspire Americans to rediscover the rich history behind U.S. gold and silver coins, which also offer financial security during uncertain times like these.
$20 BILL VS. $20 GOLD - Listen to Craig Smith
The History of Your Money today focuses in on a $20 gold piece and a $20 bill. If you go back to the early 1920's, a $20 bill and a $20 gold piece worked exactly the same in our economy. It used to be that you could go down to a local men's shop and buy a beautiful three-piece suit with either a $20 bill or a $20 gold piece.
Now lets accelerate ahead in history 95 years later. You walk into a shop today with a $20 gold piece and a $20 bill, and what happens? Well, with a $20 paper bill, you'd be lucky to find a nice tie, but a $20 gold piece, even in the worst condition is worth $1,200 today -- still ample enough money to buy a nice three-piece suit.
Did the $20 paper bill maintain buying power? No! If you look at American history, it illustrates that gold will always outperform its paper counterpart.
Do you want to have all of you money in paper, or should you have a little of your money in real money -- gold? Lets learn from history to better prepare our family and our finances for the future. -Craig R. Smith
GOLD: Precious metal prices bounced up 1% on Friday, despite a stronger dollar, with gold prices holding firm near the $1,200 an ounce level. "Gold Gains on Expectations of Weaker U.S. Economy," reports WSJ. Key economic reports to be released next week will likely further bolster the argument that the U.S. economy is still recession-bound. Without the promise of higher interest rates this year the dollar will likely fall. As both Fed Chair Janet Yellen and former Fed Chair Alan Greenspan have warned, the U.S. dollar is just another fiat currency which no longer offers a store of value for the long-term. Gold and silver still rule the world of currencies and should be physically owned today, regardless of price, as wealth insurance. As Craig Smith's example above shows, a $20 bill today retains only 3.3 cents of its original buying power. Sadly, that's the fate of our in-credible shrinking dollar.
4.9.15 - The Courage to Act ... Badly
Gold last traded at $1,193 an ounce. Silver at $16.45 an ounce.
* Moral Courage to Print Money?
* You Ain't Seen Nothing Yet!
* Defending The Free Market
* Shining Silver Opportunity
FED: The new memoir written by former Federal Reserve Chairman Ben Bernanke will be titled The Courage to Act and released in October. AP reports, "... the title of the book was inspired by the Fed's 'moral courage' in the face of 'bitter criticism and condemnation.'" It is amazing how six years of financial repression spearheaded by Mr. Bernanke is now being spun into 'moral courage'. We agree with ZeroHedge.com that "The Courage To Print" would have been a better title choice. An alternate and perhaps more fitting cover cover posted on Twitter by @Not_Jim_Cramer includes a chart showing Bernanke's achievements at the Fed - revealing both the "courage" (to drop interest rates to zero) and the "aftermath" (a U.S. economy six years later stuck in zero jobs and growth).
BANKS: "You ain't seen nothing yet, when it comes to market wreckage from a financial crisis, according to J.P. Morgan boss Jamie Dimon," reports Marketwatch. "In his annual letter to shareholders, the bank’s chief executive warned 'there will be another crisis' - and the market reaction could be even more volatile, because regulations are now tougher." Author Craig Smith writes, "We have been warning Americans that the 2008 banking crisis was just the warm-up and the real crisis is still ahead. Now we have the head of one of the top five banks in the world warning everyone that the banks may not have the ability to get through it. Can you say BAIL-INS?" Risk #8 in Don't Bank On It! on page 216 states: "8. Laws and rules are being changed to make government confiscation of bank deposits as 'unsecured assets' easier via what governments now call 'bail-ins.'"
FREE MARKET: Swiss America Chairman Craig R. Smith will be a guest on Fox Business tonight discussing the role of conservatives in Silicon Valley. According to Mr. Smith, "If you look at the amazing success of the technology sector in every American's life you cannot ignore the power of the free market and conservative capitalism has in increasing U.S. productivity and creating wealth." Tune in live at 5:30pm ET to watch it.
METALS: Precious metal prices zig-zagged on Thursday pressured by a firmer dollar. Gold ended just below $1,200 an ounce. With silver spot prices just above $16 an ounce, the case for stocking up on silver is very strong. Worldwide market demand for silver is growing, while supplies are dwindling. Both gold and silver bars and coins have a long history of serving as an excellent store of value to protect wealth when the trillions of government stimulus dollars created finally impact consumer prices. More: The Truth About Gold & Silver
4.8.15 - Fed Speaks, Markets Yawn
Gold last traded at $1,203 an ounce. Silver at $16.45 an ounce.
* FedSpeak: Rear View Mirror Economics
* Obamanomics Has Failed To Create Jobs
* Gold Bullishness is Rising, Here's Why ...
FED: Today market watchers anxiously awaited clues about the Fed's much heralded interest rate lift-off with the release of the March 17-18 Fed minutes. Last month some Fed governors favored a June launch, while others suggested waiting until early 2016. The financial markets yawned at the latest Fed news. The problem with trying to interpret Fed comments from weeks ago is that fresh economic data often changes the perspective, such as the surprisingly bad jobs report last Friday. Meanwhile, Interest Rate Observer publisher Jim Grant disputes the argument that there's no harm in the Federal Reserve keeping interest rates near zero percent, instead calling for the cost of borrowing money to be determined by the free market.
JOBS: "Obamanomics Has Failed Utterly," reports Investors.com. "This is a pitiful economic recovery, and the underperformance didn't happen by accident.
The chart shows the difference in job growth under President Reagan (whose policies underscored his philosophy that government was 'the problem, not the solution') vs. Obama. We are some 6.5 million jobs short of where we should be. That can't be blamed on the weather. The policy takeaway? Obamanomics is a grand failure. We've spent and borrowed $7 trillion in six years. The Fed has printed and expanded its balance sheet by over $3 trillion and pursued near-zero interest-rate policies." These failed policies were predicted by authors Craig Smith and Lowell Ponte in their last five books and most recently in their white paper The Biggest Bank Heist In History!
GOLD: What the Fed does, or does not do, with interest rates this year is not the only factor propelling precious metal prices this year. With growing concerns about the diminishing amount of gold reserves, rising expectations for Asian demand and an aging U.S. stock market bull that's overdue for a downturn; it is no surprise that more and more investors are turning more bullish on gold and feel prices are very reasonable right now. Call a Swiss America representative today at 800-BUY-COIN (289-2646) to discuss special U.S. gold and silver coin buying opportunities available right now.
4.7.15 - Redefining the U.S. Dollar
Gold last traded at $1,210 an ounce. Silver at $16.84 an ounce.
* Pricey Stocks Drift Lower
* Dollar = I.O.U. Nothing
* CNBC Turning Pro-Gold?
STOCKS: U.S. stocks inched lower Tuesday, despite last Friday's weak unemployment report which soothed interest rate-hike worries. But there is "Little Room for Error in Pricey U.S. Stock Market," reports WSJ. If the economy stays soft at a time when investors already are nervous about the Fed's rate-increase plans, the result could be more trouble for stocks. "There is not a lot of room for error," said Scott Clemons, chief investment strategist at Brown Brothers Harriman Private Banking, which oversees $27 billion in New York.
DOLLAR: The dollar recovered some lost ground following Friday's dismal March employment report. Meanwhile, the reality is that "The U.S. Dollar No Longer Qualifies As 'Real' Money," as we explain in our Timeless Truth About Money DVD and report.
Our U.S. money system has gone from a foundation of 'real money' to now being 'virtual', or 'IOU money' - and is quickly becoming 'IOU nothing money'. The U.S. dollar has declined over 30% since 2001 and an amazing 98% since the 1930s! Sad but true. Yet few Americans really understand why.
Historically our U.S. dollar was defined by its content of gold or silver. A real U.S. dollar was defined as 1/20 ounce of gold, or about an ounce of silver. But starting in 1913, the U.S. Treasury and Federal Reserve began a slow process of redefining the dollar - from representing a weight measurement of pure gold or silver to representing only public confidence in the U.S. government.
The result: today's dollar retains less than two cents of its original buying power in relation to gold. The famous Austrian free-market economist Ludwig von Mises once said, "The government is the only entity on earth that can take a perfectly good piece of paper, slap some ink on it - and make it become totally worthless!"
Read more here: https://www.swissamerica.com/goldtruth.php
GOLD: Precious metal prices dipped early on a firmer dollar, then rebounded on bargain hunting. Could it be that CNBC is turning bullish on gold? Several recent program segments have put the spotlight on gold, telling their viewers; "Investors should buy gold as safe haven" ... "Dennis Gartman: Gold is going higher" ... "Gold is beating stocks this year - Here's why." Clearly there are many compelling reasons to add gold to your portfolio in 2015.
4.6.15 - Zero Interest = Zero Growth
Gold last traded at $1,218 an ounce. Silver at $17.11 an ounce.
* Bad Jobs Data Boosts Stock Prices?!
* Cash: An Inconvenient Store of Value
* Gold: The Premier World Currency
ECONOMY: The dismal U.S. unemployment report for March was quietly released on Good Friday, which showed just 126,000 nonfarm payroll jobs were created, about half of what the markets expected. In addition, February's jobs numbers were revised lowered by 20% to 264,000 from the previously reported 295,000, while January's number fell from 239,000 to 201,000.
Why is jobs growth slowing down? Because GDP growth is slowing down, which will be confirmed when Q1 GDP data is released (estimates range from zero growth to 1.6%). But why is GDP growth slowing down? Because the Federal Reserve's zero interest "financial repression" has slammed on the brakes of economic growth, while temporarily boosting the value of the U.S. dollar - which hurts U.S. exports as well as domestic industry.
Worse yet, the U.S. labor force participation rate also shrunk by 0.1% to 62.7%, the lowest level since the late 1970s. Meanwhile, the average hourly earnings rose 0.3% in March after rising just 0.1% in February. Between shifting demographics and millions of Americans out of work, at some point the tight labor supply will boost wages and prices, which spells inflation rising ahead. For more details see Swiss America's latest white paper, The Biggest Bank Heist In History!
STOCKS: It should strike one as odd that the worst jobs report since January 2014 sent U.S. stock prices up triple digits today. But that's just what it did. In today's upside-down financial world, Wall Street views these reports as good news in light of the Fed's promise to begin raising interest rates. After six years of nearly free money for big Wall Street banks, they are severely addicted to the Fed's spiked punchbowl.
DOLLAR: Did you catch Fed chair Janet Yellen admitting that "Cash is not a very convenient store of value," in her recent press conference? That's tantamount to saying the U.S. dollar no longer meets one of the four most basic qualifications for any honest currency; 1. liquidity, 2. portability, 3. divisibility and 4. store of value. The inconvenient truth about our modern money system lead by the U.S. dollar is now a reality of all fiat currencies.
GOLD: Gold prices leaped upward Monday amid a flat U.S. dollar and rising bullish sentiment. "Gold is a currency. It is still by all evidences the premier currency where no fiat currency, including the dollar, can match it," said former Fed chair Alan Greenspan in a October 2014 interview. Are you looking for a currency that has maintained its store of value for thousands of years? If so, you are wise to quickly convert some of your paper assets into real assets like gold - before the sound of the coming investor stampede grows any louder.
4.2.15 - Investors Pause to Reflect
Gold last traded at $1,202 an ounce. Silver at $16.79 an ounce.
* Jobless claims slightly lower
* Investors pause before earnings
* Community banks shrink 41%
* BofA sees $1307-$1,347/oz. gold
ECONOMY: Today's jobless claims data reveals 268,000 people applied for unemployment benefits last week, down 20,000 from the prior week. Friday the jobs reports will be released, with some analysts calling for U.S. unemployment to fall from 5.5% to 5%. Meanwhile, Marketwatch reports "U.S. isn't ready for the aging workforce." According to Joseph Coleman, author of Unfinished Work: The Struggle to Build an Aging American Workforce, "There's a great storehouse of value in our older citizens, but society and companies haven't figured out how to tap into that. This is like an earthquake in slow motion, stretched out over decades."
STOCKS: U.S. stocks inched higher Thursday on a weaker dollar, lower oil prices and upbeat jobless claims following a two-day slide. Investors have been weighing mixed economic data this week ahead of corporate earnings reports which arrive next week. The consensus is to expect some major disappointments which might prompt investors to sell off stock positions as we head into summer. U.S. stock markets are closed for Good Friday.
BANKS: The decline in community banks is hurting small business, according to Entrepreneur.com. "A recent report from the Federal Reserve Bank of Richmond reveals that the number of community banks dropped by a whopping 41 percent between 2007 and 2013. That’s bad news for small business owners, who rely heavily on financing from small, local banks. Even more troubling is the potential culprit. Analysis by the Fed suggests that the Dodd-Frank Act is at least partially responsible." Many expected the Dodd-Frank Act to break up the big banks, as Craig Smith and Lowell Ponte point out on page 160 of DON'T BANK ON IT!, but instead it has helped to enshrine them. Today the biggest U.S. banks are 30% bigger than they were in 2008, while the smaller community banks are shrinking due to thousands of pages of new rules and regulations in the Dodd-Frank Act.
GOLD: Precious metal prices held on to most of the gains from Wednesday's rally with modest profit taking ahead of the Easter holiday. But Bank of America Merrill Lynch analysts are bullish on gold, despite U.S. dollar strength. They expect spot gold prices to rally to $1,307 - $1,347 an ounce in 2015. Arizona Governor Doug Ducey vetoed a bill that would have made Arizona the third state behind Utah and Oklahoma to recognize gold and silver as legal tender, saying the bill was not appropriate at this time. States which have passed 'legal tender' bills today recognize U.S. gold and silver bullion coins as spendable at their face value ($50 for 1-oz. gold and $1 for 1-oz. silver). Of course, only a fool would spend a solid gold or silver coin with a market value between 17 and 24 times higher than the face value. Such legal tender laws are seen as symbolic support for using precious metals in circulation, but without any practical purpose. Owning physical gold and silver does however makes perfect sense for long-term wealth preservation and retirement planning.
**Swiss America will be closed on Friday, April 3 in observance of Good Friday. We hope you have a wonderful Easter with your families and friends**
4.1.15 - Dollar Weakens as Gold Strengthens
Gold last traded at $1,208 an ounce. Silver at $17.06 an ounce.
* U.S. economy backsliding
* Bill Gross says assets mispriced
* 2015 Tax Freedom Day extends
* Gold rushes above $1,200/oz.
ECONOMY: Dark clouds are approaching on the economic horizon. The private sector added 189,000 jobs in March, the lowest since January 2014, according to ADP. The monthly ISM survey of manufacturing executives also fell in March for the fifth straight month, hitting the lowest level since mid-2013. The Commerce Department reported that U.S. construction projects decreased 0.1% in February. None of these indicators point to recovery. Meanwhile, U.S. unemployment data will be out on Good Friday and Q1 GDP reports next week will likely confirm the U.S. has never really escaped the Great Recession, as we have often reported.
STOCKS: Downbeat economic data on manufacturing and jobs weighed on U.S. stock prices which fell into Q1 Wednesday. "Bond King" Bill Gross tells CNBC the financial markets are 'hostile' to investors. According to Gross, in today's world where almost every asset is mispriced, investors face an impossible job trying to decide where to allocate their money. In his latest missive to clients Gross goes on to say the central banks that have kept rates low have helped boost asset prices, but the landscape will be different now that stimulus from the Federal Reserve and elsewhere is losing its impact. Buyers beware.
TAXES: Tax Freedom Day will arrive on April 24 this year according to a report from the Tax Foundation. CNS News reports, "Americans will pay $3.28 trillion in federal taxes and $1.57 trillion in state and local taxes, for a total tax bill of $4.85 trillion, or 31 percent of national income." Today, more than 70 cents of every tax dollar go for transfer payments, taking money from the pockets of some to redistribute it into the pockets of others whom politicians deem more worthy. As the great 19th century French philosopher Frederic Bastiat said, "Government is the great illusion by which everyone tries to live at the expense of everyone else. But government lives at the expense of all of us."
GOLD: Weak U.S. economic data, a weaker U.S. dollar and bargain hunting launched gold prices above $1,200 and ounce on Wednesday. In today's uncertain economic environment, the stability of gold ownership is outstanding. From ancient days right up to today, owning gold is deemed as a sign of wisdom, economic truth and just weight and measure. Owning gold as wealth insurance today is worthy of a cornerstone position in every portfolio. Swiss America promotes exchanging a portion of your paper promises for the real thing!
3.31.15 - Consumers Saving More Despite Zero Returns
Gold last traded at $1,183 an ounce. Silver at $16.60 an ounce.
* Consumers saving for tomorrow
* Investors fear Q1 earnings reports
* Bernanke's new Blog defends ZIRP
* China Bank stampede, Yuan vs. $
* World may run out of gold by 2035
ECONOMY: The consumer confidence index rose to 101.3% in March from 98.8 in February, the Conference Board reported Tuesday. Consumers appear to feel pretty confident these days, yet businesses are not as optimistic. Why? In a word, uncertainty. Higher taxes and new regulations have kept millions of small businesses from expanding over the last five years. Yet consumers are seeing the impact of lower oil prices, which helped boost personal income by 0.4% in February and lift the savings rate to 5.8%. It appears after years of spending as if there were no tomorrow, consumers are now saving like there really is a tomorrow - even if real interest rates are negative.
STOCKS: U.S. stocks retreated Tuesday as oil prices slipped and the U.S. dollar strengthened. Meanwhile, the fall in stock earnings expectations for the first quarter has been "stunning," reports CNBC. Speaking of stunning, the list of market watchers expecting a major stock market decline keeps building daily. Swiss America Chairman Craig Smith believes that growing a healthy portfolio requires the discipline of asset diversification and favors buying low and selling high. Now is a good time to take a portion of your stock market profits off of the table to buy assets which represent true value, such as U.S. gold and silver coins.
FED: Former Federal Reserve Chairman Ben Bernanke is now writing a public Blog for Brookings Institute designed to share his "Reflections on economics, finance, and policy." His first entry, "Why are interest rates so low?" offers his defense of the Fed's zero interest rate policy (ZIRP). The crux of his argument: "Contrary to what sometimes seems to be alleged, the Fed cannot somehow withdraw and leave interest rates to be determined by 'the markets.' The Fed’s actions determine the money supply and thus short-term interest rates; it has no choice but to set the short-term interest rate somewhere. So where should that be? The best strategy for the Fed I can think of is to set rates at a level consistent with the healthy operation of the economy over the medium term, that is, at the (today, low) equilibrium rate." Here we read of the former Fed head's fundamental mistrust of the free market to influence interest rates. Ben favors the Fed's "financial repression" over the free market. Bernanke concludes by blaming the U.S. economy for ZIRP saying, "The state of the economy, not the Fed, is the ultimate determinant of the sustainable level of real returns." To learn more about the negative effects of the Fed's inflation-adjusted negative interest rates read: The Biggest Bank Heist In History!
BANKS: The Washington Times reports "U.S. allies humiliate Obama, rush to join China’s new bank ... The rush to join the China's new development bank for Asia has become a stampede, with even longtime U.S. allies such as Georgia, South Korea, Australia and even Taiwan now saying they are ready to join despite the clear reservations of the Obama administration." Meanwhile, even the IMF is now endorsing a bid by China to replace the U.S. dollar with the Chinese Yuan as the world reserve currency. Remember, the average length any one currency holds the world reserve currency title is about 70 years. It was 70 years ago, in 1945, that the U.S. dollar replaced the British Pound. Will China be next?
GOLD: Gold prices ended slightly lower Tuesday on a stronger dollar, closing the month down 1.6% from the $1,200 an ounce range. "In 20 years, the world may run out of minable gold," reports Marketwatch. "The combination of very low concentrations of metals in the Earth’s crust, and very few high-quality deposits, means some things are truly scarce," Eugene King, European metals and mining analyst at Goldman Sachs, wrote in a recent research note. "Gold has been used as a measure of wealth for more than 4,000 years, as the ancient Egyptians soon worked out that gold was not only shiny and heavy, but rare," he said. Very true, in fact gold's rarity is a key factor in making it the ultimate measure of wealth - sometimes referred to as the world's numeraire, which is the French term meaning money, coinage or face value. Gold is world-class wealth protection - own it at any price.
3.30.15 - Peak Opportunity
Gold last traded at $1,184 an ounce. Silver at $16.67 an ounce.
* U.S. Economy Stalled
* Stocks Cheer Mergers
* Buck Up, But Untrustworthy
* Fed Repression of Savings
* Peak Golden Opportunity
ECONOMY: The U.S. economy may have stalled in the first quarter of 2015. Economists have now lowered Q1 GDP estimates by 0.4% to 1.4% after weak U.S. consumer spending data. U.S. jobs and unemployment data will be released on Good Friday, despite most markets being closed.
STOCKS: The DJIA jumped over 200 points Monday as equities extended gains amid corporate mergers and optimism China's central bank will follow the U.S. Fed in not raising interest rates anytime soon.
DOLLAR: Greek debt worries weakened the euro and boosted the buck Monday. However, neither a strong U.S. dollar nor increasing the U.S. money supply by trillions have revived the U.S. economy yet. But, printing trillions of dollars of debt will soon prove very hazardous to American's trust in their money. The dollar is steadily being undermined by growing evidence the U.S. money system is rigged, just like the stock market.
BANKS: Bank Risk #13 in DON'T BANK ON IT, states "'Financial Repression' by the Federal Reserve makes banks pay depositors a rate of interest lower than the rate of inflation, which means that savers lose purchasing power every day they have a bank account." As America's zero interest rate policy (ZIRP) slowly spreads worldwide into a negative interest rate policy (NIRP), savers face increased "moral hazard" by moving their savings into riskier investments such as stocks to seek higher returns. Zero interest rates have greatly helped the big banks and government, but hurt the vast majority of Americans.
GOLD: Peak Gold? According to a new report issued by Goldman's Sachs: "There are only 20 years of known mineable reserves of gold and diamonds."
As this chart illustrates, the 20-year cycle between peak gold discoveries and peak gold production will arrive in 2015. If gold production continues to decline, the law of supply and demand indicates gold prices will likely rise in the future. It could be the arrival of Peak gold supply is also creating a 'peak opportunity' today - for those who have learned the true value of physical gold as the ultimate currency on earth.
3.27.15 - Economy weak, stocks rigged, robo-advisers?
Gold last traded at $1,199 an ounce. Silver at $17.07 an ounce.
ECONOMY: The U.S. Commerce Department reports the U.S. economy grew 2.2% in 4th quarter, less than half of the 5% growth in the third quarter and the 4.6% growth in the second quarter. Analysts are expecting a slowdown in the first quarter of 2015, which ends next Tuesday, with U.S. GDP falling to the range of 1.6% to 1.8%. Next Friday, the job creation and unemployment data from March will give us a clearer economic picture. Next week the government will also report on the U.S. trade balance, home sales, personal consumption and construction from February.
STOCKS: U.S. stock indices ended slightly higher Friday, but fell 2-3% for the week. The New York Post reports, "Stock market rigging is no longer a 'conspiracy theory'". "The dirty secret is out," according to John Crudele of The Post. "With stock prices rushing far ahead of economic reality over the last six or so years, more experts in the financial markets are coming to the same conclusion - even if they don’t fully understand how it's being rigged or the consequences." Meanwhile, Charles Schwab has introduced "robo-advisers" for some of its clients in the U.S. and U.K. They say these new robots offer customers logical financial advice to help manage their portfolios while removing the greed factor.
GREECE: According to Dutch Finance Minister Jeroen Dijsselbloem, Greece might need to impose capital controls to control the accelerating risk of capital outflows from the country's banking system. As we reported Tuesday, the U.S. Justice Department has begun to call for capital controls in America. The Justice Department's criminal head said banks may need to go beyond filing suspicious activity reports. What began in Cyprus back in March 2013 now appears to be slowly spreading around the world, just as we reported.
GOLD: The latest rush into precious metals took a small breather Friday. Gold prices have steadily risen from $1,150 an ounce to $1,200 an ounce since the Fed announcement on March 18th. Meanwhile, Fed Chair Janet Yellen issued her latest round of Fedspeak, saying the Fed would keep rates at zero if inflation weakens, but adding that rising inflation or wages may not prompt the Fed to raise interest rates this year either. So it's a definite maybe. This week one of the first American minted coins, a Birch cent, sold for nearly $1.2 million. This classic coin features Lady Liberty surrounded by the words, "Liberty Parent of Science & Industry." Swiss America recommends a balanced portfolio which includes gold, silver and U.S. collector coins for long-term protection and growth potential.
3.26.15 - Mid-East Turmoil Boosts Oil and Gold
Gold last traded at $1,204 an ounce. Silver at $17.06 an ounce.
OIL: Today, investor worries over Yemen security boosted crude oil prices above $50 a barrel. UPI reports, "Multilateral military operations in a collapsing Yemen injected a layer of risk to global oil markets, pushing crude oil prices up 2 percent Thursday." Enjoy lower gas prices while they last, which may not be much longer.
DOLLAR: The buck bounced up modestly today on rising geopolitical concerns. But the stronger dollar also has a downside for businesses, such as Buffalo, NY-based manufacturer Eastman Machine. "As Dollar Heats Up Overseas, U.S. Manufacturers Feel a Chill," reports The New York Times. "Confronted with a steep drop in the value of the euro against the dollar, customers in Europe warn that they can no longer afford to buy Eastman’s American-made cutting equipment without deep discounts." Meanwhile, the IMF may boost the Chinese Yuan currency's status. Marketwatch reports, "In what would be a huge milestone in China’s emergence as a major world financial power, the International Monetary Fund looks likely to adopt the country’s currency into the basket that makes up its global forex benchmark." Move over Dollar, Euro, Pound and Yen; China's Yuan will soon be joining you at the table.
FED: "The Federal Reserve's efforts to stimulate the U.S. economy after the financial crisis ended up costing savers nearly half a trillion dollars in interest income, according to report released Thursday," reports CNBC. "In a landmark report, Swiss Re quantifies just how much savers and others have languished while the policy has pushed the Fed's balance sheet past the $4.5 trillion mark but failed to generate above-trend economic growth or substantial core inflation." Swiss Re went on to say that 'financial repression' has taken its toll not only on savers but also on investors. Sound familiar? If not, read The Biggest Bank Heist In History! ?
STOCKS: U.S. stocks gyrated Thursday, ending lower for a 4th session. U.S. stock returns have been impressive in recent years, but what about the longer term? Numismatic News reports Gold, Silver and Mint-State U.S. coins have all out performed stocks over the last 15 years - by a long shot.
GOLD/SILVER/COINS OUTPERFORM STOCKS
15-Year Comparison (1999-2014)
|$20 St Gaudens MS-63||+171.0%|
|$20 Liberty MS-63||+161.0%|
|Morgan Silver MS-65 $1||+73.9%|
GOLD: Precious metal prices rushed to fresh 4-week highs Thursday, for an 8th-straight session, despite a firmer U.S. dollar. It appears the dollar volatility is not distracting buyers from gold's long-term upward trajectory. The World Gold Council thinks changing global currency landscape is trumping the usual dollar-gold price relationship. "While the fact that the gold price is quoted in U.S. dollars gets a lot of attention, its relevance is overstated,” said Juan Carlos Artigas, director of investment research at the World Gold Council. "Changes in global markets and the structure of the gold market should soften the dollar’s influence on gold in the long run."
The trend is your friend. Over the last 10 to 15 years, precious metals have been one of the top performing asset classes. Let Swiss America help our you balance your portfolio with physical gold and silver - the best performing wealth insurance assets on earth.
3.25.15 - Gold Outshines Zero Interest Economy
Gold last traded at $1,197 an ounce. Silver at $17.00 an ounce.
STOCKS: The DJIA suffered a triple-digit decline for 3rd day after weak durable-goods data and despite the Kraft-Heinz mega-merger announcement. "U.S. Stocks are overpriced, over-leveraged, headed for trouble," says the U.S. Government's Office of Financial Research. Meanwhile, merger mania is off and running in this year. Marketwatch reports this year's merger and acquisition tally is at about $802 billion globally - the highest year-to-date global M&A total since 2007. Hard times can bring together strange bedfellows.
ECONOMY: The recovery took another step backward on Wednesday as orders for durable goods unexpectedly dropped 1.4 percent in February, a sign the slowdown in global growth may be weighing on American manufacturers. Today 47% of American households live paycheck-to-paycheck, unable to save anything. The Middle Class is shrinking, but that is not necessarily a bad thing, according a new Pew Research Center study. "The share of adults in middle-income households has fallen from 61% in 1970 to 51% in 2013. But many households are moving up. The share of upper-income households grew from 14% to 20% in that time period, while low-income households narrowed from 29% to 25%.
FED: At least one Federal Reserve policy maker sees no need to raise interest rates this year. "I see no compelling reason for us to be in a hurry to tighten financial conditions until inflation rates rise," Chicago Fed President Charles Evans said to the Official Monetary and Financial Institutions Forum in London. This may be yet another example of Fedspeak. Some Fed leaders talk tough about returning to normalization of interest rates while other explain why zero interest rates are in our best national interest ... indefinitely, as Craig Smith and Lowell Ponte explain in The Biggest Bank Heist In History!
GOLD: Precious metal prices rose to their highest level in three weeks on Wednesday, as weak U.S. data bolstered the argument the Federal Reserve would likely take its time before raising interest rates. WSJ reports, "The data subdues growth expectations and implies further upside for gold," said Bart Melek, head of commodities strategy at TD Securities. "Prices are likely to reach $1,250 an ounce in the second quarter," Mr. Melek said. The mainstream gold bears have begun a slow retreat, which confirms today is a smart buying opportunity for physical U.S. gold and silver coins. Precious metals have great upside potential even in a zero interest world!
3.24.15 - Capital Controls in America?
Gold last traded at $1,191 an ounce. Silver at $16.98 an ounce.
STOCKS: The major U.S. indices finished lower Tuesday in choppy trading, despite upbeat economic news. The U.S. consumer price index (CPI) rose 0.2% in February for the first time in four months. Meanwhile, New home sales hit 7-year high in February, however we are still at less than half the average new homes sold a decade ago - before the housing boom.
DOLLAR: The U.S. dollar recovered slightly against the euro following two straight sessions of losses on word the Fed may still hike interest rates this year. We shall see. Did you know the word "dollar" is defined as a weight measurement of physical gold or silver according to the U.S. Constitution and Coinage Act of 1792? It's true. But today the U.S. dollar is a weight measurement of nothing, except debt and public confidence. As former Fed economist John Exter has said, "Today's U.S. dollar is a I.O.U. Nothing".
GOLD: Precious metal prices continued their upward climb despite a stronger dollar. $1,200 an ounce gold could be surpassed this week. This is no time to delay precious metal purchases. Dollar-denominated assets are at risk and gold serves as the perfect wealth insurance. As we have discussed, gold is more than a commodity or an investment, it is the world's ultimate form of currency - accepted worldwide.
BANKS: The U.S. Justice Department calls for capital controls in America, reports WSJ. "The U.S. Justice Department's criminal head said banks may need to go beyond filing suspicious activity reports when they encounter a risky customer. We encourage those institutions to consider whether to take more action: specifically, to alert law enforcement authorities about the problem. A tip-off from a bank about a suspicious customer could lead law enforcement to seize funds or start an investigation."
This is Major Risk #20, covered in the book DON'T BANK ON IT!, which says ... "Banks increasingly are resisting and refusing depositor requests for large withdrawals, much as would happen under government 'capital controls.' To most Americans, it seems incredible that your bank would refuse to let you withdraw your own money. We challenged them, as we challenge you right now ... test this. Go to your bank where the tellers are always friendly and say you want to withdraw $5,000, $10,000 or $15,000 from your account in cash. What others we challenged have told us, in astonishment, is that their bank refused while asking why they wanted the money. In many banks the tellers and assistant managers appear to have been trained in techniques of putting such customers on the defensive by insisting that they justify such a withdrawal."
Meanwhile, Fox News reports, Congress is launching hearings on complaints from businesses targeted by 'Operation Choke Point' ... "Banks and other financial institutions were reportedly pressured to cut off accounts for targeted businesses. This included gun stores, casinos, tobacco distributors, short-term lenders and other businesses. the FDIC put out a list of 30 high-risk businesses, but that list has since been rescinded. The U.S. Consumer Coalition claimed taking down that list only removed a guideline, and without a specific list of businesses, the subjectivity of who gets targeted was increased." ['Operation Choke Point' is also covered on pages 156-157 in DON'T BANK ON IT!]
DEBT: "The world's next credit crunch could make 2008 look like a hiccup," according to the Telegraph. "A solar eclipse, a super moon, the FTSE 100 breaching 7,000 and the US Federal Reserve speaking in tongues - truly some kind of financial apocalypse must be nigh. Let’s say that US interest rates do rise sooner and faster than the market expects. That means bond prices, which always move in the opposite direction to yields, will plummet. US Treasury bonds are like a mountain guide to which most other global securities are roped - if they fall, they take everything else with them. Who will get hurt? Everyone. But it’ll likely be the world’s banks, where even little mistakes can create big problems, that suffer the most pain."
3.23.15 - Dollar falls on Fedspeak
Gold last traded at $1,187 an ounce. Silver at $16.89 an ounce.
DOLLAR: The U.S. dollar index fell for a second session Monday, against a basket of major currencies, after traders unwound bullish dollar positions on the likelihood that Federal Reserve policy will be accommodative over the near term. It appears the Fed's latest ambiguous statement is having its intended bearish effect on excessive U.S. dollar bullishness. A weaker dollar has a beneficial effect on U.S. stock speculation and helps to reduce the pressure for the Fed to lift interest rates sooner rather than later.
FED: The Fed is no longer 'patient', but they’re also 'not impatient', we learned from Fed chair Janet Yellen last week. Instead, they are now data dependent. But is the data trustworthy? Or are they interpreting it correctly? WSJ says "It's High Time to Audit the Federal Reserve". "History shows that these so-called experts are prone to destructive inflationary and deflationary blunders, and that the Fed’s actions over the last century represent the greatest systemic risk of any financial organization in the world. Since the Great Recession ended, the Fed has been running an unprecedented, giant monetary experiment. This experiment includes years of negative real interest rates, the creation of a huge asset-price inflation, and the monetization of real-estate mortgages and long-term bonds. Should the Fed, or anybody, be allowed to carry out such vast and very risky experiments without effective supervision? The correct answer is: no." For more about the Fed read our latest White Paper The Biggest Bank Heist In History!
DEBT: A global liquidity crisis may spark the next financial crash, reports London Telegraph. "Traders warn of a global credit 'meltdown' if corporate bond markets don't improve. Investors across corporate bond markets are finding it harder to buy and sell company debt. And some investors are beginning to fear that the lack of liquidity will be the spark that ignites the next crisis in financial markets. A rate hike by the US Federal Reserve, which would be the first since 2006, could trigger turmoil.".
BANKS: As interest rates fall, borrowing becomes more attractive than saving. Central banks hope that banks will lend more money at low rates to consumers, who (they hope) would spend money, as opposed to saving it, due to rising economic uncertainty. But, as the Aden Sisters report, "It's not happening yet. The biggest problem is debt and we believe it's passed the tipping point. Debt has increased 40% in seven years to $200 Tril. Gold, as the ultimate currency, is only second to the U.S. dollar in terms of major currency strength. The dollar rise will soon be stemmed, either by intervention or exhaustion. A dollar decline will give gold a boost."
GOLD: Precious metal prices hit a two-week high Monday, with gold prices closing in on $1,200 an ounce. The weaker dollar forecast is bullish for gold, as both gold and the buck are in competition for the top global currency spot - with gold having a 6,000 year history of always winning. Meanwhile, The LBMA Gold Price, the newly launched gold price fix mechanism, ran without a hitch on Friday, according to the London Bullion Market Association. LBMA's chief executive, Ruth Crowell, says, "I'm delighted that Friday's launch went smoothly and that now all four precious metals prices have been successfully transitioned to independently administered, electronic auctions. Like its predecessor, the new fix runs twice daily at 10:30am and 3:00pm London time."
2016: Senator Ted Cruz annouced the first major campaign of the 2016 presidential season Monday with a kickoff speech at Liberty University vowing to reignite "the promise of America." "Imagine a president that finally, finally, finally secures the borders," said Cruz. "Imagine a simple flat tax," ... "Imagine abolishing the IRS," reports Reuters. He spoke on the fifth anniversary of President Barack Obama's health care law - legislation that prompted Cruz to stand for more than 21 hours in the Senate to denounce it in a marathon speech that delighted his tea party constituency and other foes of the law.
3.20.15 - Metals Spring Forward
Gold last traded at $1,184 an ounce. Silver at $16.88 an ounce.
DOLLAR: The U.S. dollar sell-off accelerated Friday on the expectation that Federal Reserve policy makers would leave interest rates lower for longer, just as authors Craig Smith and Lowell Ponte predicted in their latest White Paper The Biggest Bank Heist In History!
GOLD: Precious metal prices ended the week 2.3% higher on the back of a weaker U.S. dollar and lower U.S. treasury yields. Gold prices could easily rise beyond $1,200 an ounce next week if this trend continues. With the price of wealth insurance rising, now is the time for action - both in your personal portfolio and in your retirement portfolio before April 15th.
FED: On Wednesday the Fed did virtually nothing, except to change a few words in their official policy statement. The Fed, and perhaps all central banks, are now trapped in a zero-interest, near-zero growth world. The Fed is afraid to take the spiked punchbowl away from the Wall Street party, despite ample evidence they are creating a culture of speculation by rigging the financial markets to benefit big banks with near-zero interest money. Shame on them!
ECONOMY: John Crudele at NYPost explains why interest rates can't rise yet: "Right now the data aren’t looking promising for those who want higher rates. A real-time tally of the nation’s gross domestic product for the first quarter of 2015 - conducted by the Federal Reserve Bank of Atlanta - shows that the US economy might be contracting (not growing) by the time the first quarter ends on March 31. Earlier this month, the GDPNow figures compiled by the Atlanta Fed showed that the US economy from January until early March had grown at only a 1.2 percent annualized rate."
BANKS: "SOB bankers should be punished," reports CNBC. How do you improve the culture of Wall Street and restore faith in finance? Personally punish the industry's bad apples, according to two longtime observers. "I think we need to personalize the penalties for those who are sinners. It's got to hurt them individually," Charles Ellis, a prominent investment consultant and author, said at an event this week in New York on improving the financial industry. Sadly, today it appears our mega bankers are too-big-to-jail.
JUST CAPITAL: "Can capital be just?" asks hedge fund manager Paul Tudor Jones II in a 2015 TED presentation. As a firm believer in capitalism and the free market, Jones believes it can be."This gap between the 1 percent and the rest of America, and between the US and the rest of the world, cannot and will not persist," says the investor. "Historically, these kinds of gaps get closed in one of three ways: by revolution, higher taxes or wars.” Jones proposes a fourth way; just corporate behavior. He formed Just Capital, a non-profit that aims to increase justness in companies.
STOCKS: U.S. stocks saw a technical rally on this "quadruple witching" Friday as equity options, stock-index futures, stock index options, and single stock futures all expired today. But this rally is not to be trusted looking ahead. Marketwatch reports stocks more often than not produce below-average returns during widely followed "March Madness" sports tournaments which begin next week. "During last year’s March Madness the S&P 500 fell 1.5% between the opening round of the 2014 NCAA championship and the final game."
3.19.15 - Fed's "Rigged" Markets Headed for Hard Fall
Gold last traded at $1,169 an ounce. Silver at $16.11 an ounce.
STOCKS: Wednesday's Fed-induced stock market rally reversed direction on Thursday, taking the Dow down triple digits as investors further digested the Fed's latest statement. "The stock market is rigged, but that's not necessarily a bad thing," strategist Ed Yardeni said Thursday to CNBC. "This is not about investing, this is all about the central bankers," he added. What more do you need to know? Now is the time to reduce stock holdings and increase diversification into tangible assets. Meanwhile, the Philadelphia Fed's business index slipped to new low, further undermining the so-called economic recovery.
FED UP: "Can we ever find our way back to free markets?" ask Craig Smith and Lowell Ponte. "The economy-shaking Fed announcement: the easy cash will keep coming until at least June - and perhaps until 2017. Nobody was surprised. Zero interest rates may be good news for the big guys and government, but it's very bad news for you and me. Whatever this economic system is that we now live under, it is no longer free market capitalism." Craig Smith was a guest on The Howie Carr Show today discussing the Fed's latest "sad" policy statement, and offered listeners a free copy of The Biggest Bank Heist In History! He told Carr's listeners the Fed is creating market bubbles in stocks and the dollar, while (un)stimulating the slowest recovery in U.S. history. The Fed has set us on course for a hard economic landing in the near future.
CAPITALISM: Fox Business: "Misguided Attacks Upon Capitalism" - With U.S. corporations reporting record profits, one would think the world would be embracing our free market system, but protests are turning violent both in Germany and the U.S., reports Neil Cavuto on Fox Business Network. Author and Swiss America Chairman Craig Smith feels groups such as Blocupy in Europe and BlackLivesMatter in the U.S. are misguided in protesting capitalism, which is the engine of jobs and improving lives. Regarding Blockupy's violent protest of the new $1.4B headquarters of the UCB, Craig agrees with Neil that we should not be depending upon Central Banks to improve the economy. Banks don't create wealth, they distribute and store wealth in accordance with a free market. Capitalism works, says Smith. We need to go back to the basics, as Ben Franklin insisted be engraved on our first U.S. coinage, "America: Liberty, Industry and Parent of Science" - which provided the foundation to create the greatest country in the history of the world.
BANKS: "Swedish central bank cuts key rate further below zero," reports Telegraph. "The world's oldest central bank has slashed its main interest rate to -0.25% and will increase its quantitative easing program as it seeks to revive prices and drive down the value of its currency." Meanwhile, at least one bank is finally on trial for the financial crisis, reports New Republic. "The trial of the century - a long-awaited determination of the damage perpetrated by Wall Street institutions in the financial crisis - began Monday in New York. But it's only happening because one bank - unlike Goldman Sachs, JP Morgan, Citigroup, and Bank of America - refused to settle out of court. The Japanese firm Nomura stands accused of lying to mortgage giants Fannie Mae and Freddie Mac about the quality of mortgages pooled into securities during the housing bubble. The case will finally reveal hard data on just how much money Nomura, and the rest of the industry, made through fraud."
GOLD: Precious metal prices extended gains Thursday despite a sharply higher dollar. Once again we see the strength of gold as the world's preferred currency. Barrons gives a convincing argument Why Gold Will See $2,000. "Over the next decade, emerging market central banks will need to hold a larger stock of physical gold in their vaults to shore up confidence in the newly floating exchange rates. A recent IMF paper showed that gold was viewed by central banks as an asset that could be used to reduce risk. These results are consistent with a survey ANZ conducted with central banks and sovereign wealth fund managers in early 2014 which found that almost half of the respondents believed that gold was a safe haven asset over the long-term. Additionally, over 60% of respondents believed that gold would constitute a larger proportion of central bank reserves over the next two years. Gold prices are likely to rise gradually, eventually breaking through the $2,000/oz level within the next decade."
Get gold now, thank yourself (and us) later!
3.18.15 - Fed Extends Free Lunch, Gold Prices Jump
Gold last traded at $1,166 an ounce. Silver at $15.89 an ounce.
FEDSPEAK: The Fed dropped the word "patient" but signaled more patience in raising interest rates. “Just because we removed the word patient from the statement doesn’t mean we are going to be impatient," Fed Chair Janet Yellen said in a press conference Wednesday. That is what we call classic "Fedspeak". Swiss America Chairman Craig Smith writes, "Janet Yellen is going to continue zero interest rate policies (ZIRP) because the Fed believes the economy is not strong enough to survive an interest rate hike. How sad! It is really something to see the stock markets clearly being supported by Federal Reserve actions for a sixth consecutive year. In the meantime, savers will continue to lose buying power and the value of their deposits." Marc Faber tells CNBC, "The Fed won't raise rates this year. Any move in the federal funds rate would be meaningless until it hits 3 percent." We agree.
STOCKS: The Dow jumped over 1% on the Fed statement, interpreting it as an extension of the virtually free lunches for big banks, speculators and borrowers. But Real Clear Markets reports, "Fed policy has fostered the delusion that cheap money is a free lunch. Such thinking results from years of interventionist monetary policy. After six years, quantitative easing and zero rate policies have impaired the recovery and exacerbated wealth disparities. A wealth effect has a disparate impact on households and businesses depending upon whether they belong to the wealth economy or the income economy. The price of our 'free lunch' is going up." But for now, the Wall Street party continues.
BANKS: "Banks struggle to keep up as cybersecurity risks increase," reports IPWatchdog.com. "As cyber attacks grow in complexity, hackers are likely to stop targeting retailers and other stores and start to target the banks themselves. If they're successful, this could have catastrophic consequences on our economy and global financial systems." Meanwhile Reuters reports, "Anti-capitalist protesters clashed with riot police near the new headquarters of the European Central Bank (ECB) in Frankfurt on Wednesday and set fire to barricades and cars, casting a pall over the ceremonial opening of the billion-euro skyscraper. The protest was organized by a group called Blockupy." Author and Swiss America Chairman Craig Smith will be discussing this topic on Fox Business tonight.
GOLD: Precious metal prices flew upward on a weaker U.S. dollar after the Fed statement. However gold is a safe haven in an uncertain world no matter what the Fed says or does. The gold market could see another major perception shift Friday as the Chinese begin participating in the the twice-daily gold price fix. Marketwatch.com reports, "The London Bullion Market Association said the LBMA Gold Price will launch the ICE Benchmark Administration operating the auction process on Friday. The London Gold Fix has been the target of decades of manipulation allegations." Bottom line, gold prices are back on the move and additional market transparency will help encourage new investors to add gold to their portfolio. So, what are you waiting for? We just might look back at $1,175 gold as the best buy of the year!
LAUGH OF THE DAY: "I don’t think the system is broken, I think it's working well. I believe the Fed is already one of the most transparent central banks of any around the globe."
-Janet Yellen, Commenting On "Audit The Fed" Bill
3.17.15 - The Fed's Big "IF"
Gold last traded at $1,148 an ounce. Silver at $15.58 an ounce.
FEDSPEAK: Tomorrow's Fed statement is unlikely to bring much clarity to markets. Marketwatch.com reports, "Hell will break loose if the Fed loses its patience." We shall see. Craig Smith thinks the markets may be fretting too much, too soon over Fed interest rate hikes. As he covers in his latest White Paper, The Biggest Bank Heist In History! the Fed is now trapped by their own words. Remember Janet Yellen has been saying the Fed will raise interest rates "IF" we see strong employment AND wage growth AND 2% inflation. That's a Big IF, since none of those goals have been met yet. The truth is, we could be stuck in a zero interest world for yet another year - further punishing Middle Class workers and savers while rewarding big banks and borrowers.
STOCKS: U.S. stocks moved sharply lower on Tuesday, with the Dow suffering triple-digit losses despite a weaker dollar. Investors are nervous as the Fed's two-day meeting has many expecting the central bank to prepare the way for an interest-rate hike this summer by removing the word "patient" from its statement. Meanwhile, the February housing report points to a slump in new home construction.
DEBT: "Let the debt ceiling games begin!" says Fortune.com. Will Republicans cave in to Obama and raise the debt ceiling? Or will Obama cave in to the GOP? Or might the President invoke the 14th amendment to unilaterally raise the debt ceiling? Or might the Federal government shut down again for 16 days, like we saw in 2013? Meanwhile the economy is on life support by tapping into government pension funds. Today House Republicans unveiled a budget proposal that would eliminate the federal deficit within 10 years, increase military spending and repeal the Affordable Care Act. The chances of approval? Near zero.
DOLLAR: "America's European 'Allies' Desert Obama, Join China-led Infrastructure Bank," says ZeroHedge.com, the sea of de-dollarization has reached the shores of Europe. The London Financial Times reports, "France, Germany and Italy have all agreed to follow Britain’s lead and join a China-led international development bank, according to European officials, delivering a blow to US efforts to keep leading western countries out of the new institution." Forbes.com says that leaves Obama with three options; 1) Continue to press its allies not to join the AIIB until governance procedures for the bank are assured, 2) Join the AIIB itself, or 3) Drop the issue. ZeroHedge.com concludes, "It won't be long before other western nations jump on the anti-dollar bandwagon with action and not just words."
ENDGAME: "We are now at the endgame of the biggest economic and financial bubble in history," says Egon von Greyerz, founder of Matterhorn Asset Management. "With both U.S. stocks and bonds near the highs and the dollar recently surging, it seems that the U.S. is still an invincible superpower. But sadly, the U.S. will just be the last country to fall and that fall is imminent. 23 countries have already lowered interest rates in a futile attempt to stimulate the economy. But pushing on a string has no effect anymore. The three super-bubbles in the U.S. - dollar, stock market and bonds - I expect two, if not three, to start a major and sustained fall this year. This fall will be the beginning of a long and very hard collapse of the world economy."
GOLD: Precious metal prices drifted lower on technical selling ahead of the Fed statement Wednesday. Short-term speculators may affect daily gold price swings, but not the long-term trend, which has been upward since 2001. Smart investors have learned to buy gold and then hope the price goes lower, so they can acquire more gold at a lower price and "cost-dollar average" all of their holding lower. If you would like to discuss this proven strategy, call your Swiss America broker today at 800.289.2646.
3.16.15 - Strong Delusions of Grandeur
Gold last traded at $1,153 an ounce. Silver at $15.62 an ounce.
FED: Get ready for linguistic gymnastics later this week from the Fed. Why? Because "For the Federal Reserve, patience may no longer be a virtue," reports Associated Press. "Surrounding the Fed's policy meeting this week is the widespread expectation that it will no longer use the word 'patient' to describe its stance on raising interest rates from record lows." Could Fedspeak put the brakes on the dollar rally? Stay tuned.
DOLLAR/GOLD: Speaking of the dollar rally, take a look at this 13-year chart comparing the U.S. dollar index with the spot price of gold. Back in 2002 the Dollar Index stood tall, above 120. Since then it has been underwater. Meanwhile gold prices, which began at $297 in March 2002, have risen to $1,152 today, a 257% price increase. Swiss America Chairman Craig R. Smith calls this a "strong dollar delusion" because keeping all of your money in dollars is like walking up a down escalator. Lots of action, but no progress. In recent years physical gold has been decoupling from commodity prices, such as oil, but has remained stable during the recent dollar "rally". Why? Because the world recognizes physical gold alone as the ultimate form of money which maintains buying power. Mr. Smith advises to ignore the daily price fluctuations of gold and to focus on long-term growth and wealth preservation.
STOCKS: The Dow rallied triple digits Monday as the U.S. dollar index sliped below 100 and oil prices slid to 6-year low. Could it be the U.S. economy is not following the "recovery" script because it is not a real recovery, as Craig Smith and Lowell Ponte have been writing about for the past six years? Meanwhile, Marketwatch reports, "Bull market is 'closer to the end' than investors think".
DEBT: The U.S. hit the debt limit again Sunday night. So beginning today, Treasury Secretary Jacob Lew will take "extraordinary measures" to keep the government from defaulting on its debt. Those include a halt to new investments in federal employee pension funds, a moratorium on deposits from state and local governments and drawing down a $23 billion currency stabilization fund.
BANKS: "Fed Should Stop the Stress Test Guessing Game", reports AmericanBanker.com. "There is a big problem with the Fed's current testing regime: the tests lack transparency. Banks can wind up failing them for fairly minor reasons - not because they face a liquidity shortfall. Since stress tests only happen once a year, banks can 'game' the stress tests by accumulating the right positions necessary to meet the requirements when the tests roll around and quickly revert back to smaller capital cushions. A higher frequency of tests throughout the year would easily prevent this moral hazard."
UN-RETIREMENT: "Obama needs to loosen grip on retirement plans," says CNBC. "The president just recently encouraged the Department of Labor to push for more rules and regulations on the financial brokers and advisers who provide employer-sponsored 401(k) plans. This is the complete opposite of the direction we should be taking. The time is right to 'decouple' retirement savings from our employers."
3.13.15 - A little perspective, please!
Gold last traded at $1,152 an ounce. Silver at $15.50 an ounce.
MARKET SUMMARY: U.S. stocks suffered sharp losses Friday as consumer sentiment fell, despite lower producer prices. Market volatility is on the rise, despite "healthy" banks being pumped up by six years and $9 trillion in Fed stimulus. Precious metal prices today traded steady to higher, despite the U.S. dollar index reaching 100 for the first time since March 2003.
ECONOMIC REALITY: Is the reality of the fragile state of the world economy beginning to sink in? What will happen when the next economic crisis strikes our fractured monetary and banking system? Likely panic because we've lost trust in virtually every one of our institutions; our leadership, the mass media and, sadly for many, even our religion or value system. But there is a 6,000 year old solution to preserving your hard-earned wealth, which represents your time, your labor and your future: GOLD.
As we discuss in our 2015 Real Money Perspectives, despite what financial "experts" may say, gold is more than a commodity or an investment - it is the world's one and only trustworthy store of value. If gold were a commodity its price would have fallen in half, like oil prices have. If gold were just an alternative investment, its price would not have remained stable during the 2014-15 stock market and dollar rally.
THE GOLD STANDARD: Amazingly, America had a stable gold foundation for growth and prosperity for over 170 years of our history; between 1792-1964. The prices of good and services gently deflated and labor and wealth held in gold coins gradually increased over time. However, since our leaders abandoned the Gold Standard - the foundation for our money and currency system - the prices of everything have been rising and the value of the U.S. dollar has been falling.
As this chart illustrates, over the last sixty years the value of our time, labor and savings has been in decline. Without gold, it takes more of our time (and life) to buy the necessities of life, such as an automobile or a home. But notice the price we pay for a car or home has historically declined if you had wisely put yourself onto a personal gold standard decades ago.
The good news is that it is never too late to start putting yourself on a personal gold standard. With precious metal prices hovering near 4-year lows, now is the time to buy some wealth insurance. If you already own physical gold that was purchased at a higher price, buy more at today's lower price to bring your average wealth insurance cost lower. This is what smart money does during temporary price dips. And if, by chance, it goes lower next month, buy more!
As the tide of political and economic uncertainty rises, so does the necessity of protecting your life savings with gold coinsyou can hold in your own two hands.
No one knows what the future will bring, but based upon the past we can say with confidence that gold is one of the most trustworthy assets to own over the long haul. Forget about the gold price, gold represents true value at any price. And please, don't wait to buy gold, buy gold and wait!
3.12.15 - Strong dollar creates new global stress test
Gold last traded at $1,151 an ounce. Silver at $15.51 an ounce.
DOLLAR: The U.S. dollar eased back on Thursday after rushing toward 12-year highs this week. However, the surging dollar now poses a major policy dilemma for Fed this month. "The world is more dollarized today than any time in history, and therefore at the mercy of the US Federal Reserve as rates rise," reports Telegraph. "Sitting on the desks of central bank governors and regulators across the world is a scholarly report by the Bank of International Settlements that spells out the vertiginous scale of global debt in US dollars, and gently hints at the horrors in store as the US Federal Reserve turns off the liquidity spigot."
BANKS: "Now healthy, banks gush cash," says USA Today, reflecting the passing of 29 of 31 major banks in the recent Fed stress test. But should Americans begin dancing in the streets to know that our major banks have a measly 5% minimum cushion to cover another major financial meltdown? You be the judge. Keep in mind Bank of America and five other big banks stumbled in Fed stress tests. CNBC reports, "The bank sector is now regulated by 'hypotheticals' ... Beware of corporations bearing shareholder gifts ... stock repurchases are a clever accounting trick to inflate the much-publicized earnings per share metric for a stock."
STOCKS: U.S. stocks cheered a weaker dollar and the Fed's green light to big banks to expand stock buybacks. Downbeat economic data was ignored, such as; U.S. import prices climbing last month for the first time in nine months and retail sales slumping in February for the third month in a row, missing forecasts. Falling retail sales indicate that consumers aren't spending the windfall from lower energy prices. Why? Two big reasons; 1) The U.S. middle class is stuck in neutral, due to stagnant wages and 2) Americans have all but lost confidence in government. Gallup reports, "Only 23 percent of Americans have a great deal of confidence in the Supreme Court, 11 percent in the executive branch and 5 percent in Congress."
GREEK CRISIS: "Greece Passes Law To Plunder Pension Funds," reports ZeroHedge."Greek government finally signed the bill today that enables them to plunder the Greek people's pension funds (for their own good). The massive irony of this bill is the bill enables greek deposits to be fully invested in Greek sovereign bonds ... which Tsipras and Varoufakis both admitted today is 'unsustainable' and 'will never be repaid.' Cash reserves of pension funds and other public entities kept in Bank of Greece deposit accounts can be fully invested in Greek sovereign notes, according to amendment to be submitted in parliament, country’s finance ministry."
GOLD: Precious metal prices steadied Thursday on a weaker dollar. March is only half over but demand for American Eagle gold coins from the U.S. Mint has surpassed the previous month's sales. "The U.S. Mint has sold 41,000 ounces of gold American Eagles, up from 37,000 ounces in February." Meanwhile, Reuters reports, "A rare five-dollar gold piece and a prized silver dollar each could fetch $10 million or more in upcoming auctions, making the American rare coin market as attractive as fine art." During times of economic uncertainty both hard money and rare collectibles tend to be viewed at as safe havens. Swiss America believes a balanced portfolio should include physical gold consisting of both bullion and numismatic coins.
3.11.15 - "Zombie Banking System" Dead Ahead!
Gold last traded at $1,150 an ounce. Silver at $15.36 an ounce.
STOCKS: U.S. stocks traded slightly lower following Tuesday's smackdown. Marketwatch reports, "The reality is that the market will never be fully ready for a hike in the interest rate. Investors are used to cheap money, and they are not going to be happy if you pull that plug," said Naeem Aslam, chief market analyst at AvaTrade. Meanwhile, Wall Street profits may be down this year, but bonuses are still up 3%.
DOLLAR: The euro is just 7 cents away from dollar parity for the first time since 2002. Some experts say this time the euro could fall to 85 cents. But "The math doesn't add up" reports CNBC. "The upward run in the U.S. dollar to 12-year highs shows the currency index could be reaching a peak soon, if history is any guide." Could a strong dollar force the Fed to stall interest rate hikes? Stay tuned. "Today, the dollar has reached the last of its cat-like nine lives. It might continue as a ghost or virtual or zombie currency. It's fast-approaching next fall, however, will end its final incarnation as tangible currency," writes Craig Smith on page 69 of DON'T BANK ON IT!
BANKS: Speaking of zombies ... it's a big day for big banks as the Fed rules on stock buybacks and dividends. JPMorgan Chase & Co. and Citigroup Inc., are expected to win Federal Reserve backing today to buy back more shares and increase their dividends in the coming year. But critics of the strategy question its sustainability. The post-crash financial system is more concentrated than before; the biggest banks more, not less, dominant - and subprime lending is back. Bloomberg reports, "Bank buybacks are a symptom of a 'zombie banking system'".
DEBT: "Our country is broke," says Boston University economist Laurence Kotlikoff: "It's not broke in 75 years or 50 years or 25 years or 10 years. It's broke today," he told the Senate Budget Committee. "Indeed, it may well be in worse fiscal shape than any developed country, including Greece." In reality we're facing a fiscal gap of $210 trillion, Kotlikoff proclaimed. That's 16 times larger than official U.S. debt, "which indicates precisely how useless official debt is for understanding our nation’s true fiscal position."
GOLD: Precious metal prices fell to four-month lows on Wednesday as a rally in the U.S. dollar sapped interest from foreign buyers. Yet, according to the latest World Gold Council data, last year the world’s central banks went on a golden shopping binge to take advantage of the gold price dip. Bank net purchases amounted to 477 tons - 17% higher than the previous year. So why are central banks buying when speculators are selling? Simple. They know that gold is the world's ultimate currency and buying opportunities below $1,200 could soon end. Wise long-term gold owners should consider doing the same right now, while the gold price is at $1,150 an ounce.
3.10.15 - Markets Teeter Amid Dollar Fever
Gold last traded at $1,160 an ounce. Silver at $15.63 an ounce.
DOLLAR: With the U.S. dollar touching fresh 12-year highs, you would think the U.S. markets would be doing a tap dance, but in fact just the opposite is occurring. Today the strengthening dollar is creating plenty of losers, including oil and other commodity markets, emerging markets and the U.S. stock market -whose corporate earnings are very vulnerable to a stronger buck.
STOCKS: The DJIA shed over 300 points Tuesday, while stocks worldwide skidded lower as investor perception grows that the Fed will raise U.S. interest rates sooner rather than later. We shall see. Meanwhile, some experts say the euro is headed for parity with the dollar this year as the EU launches its $1 Trillion QE experiment this month and Europe tightens the noose on Greece. John Hussman offers his stock market warning, "Today U.S. stocks are one of the most overvalued, overbought, overbullish syndromes in the historical record, combined with deterioration in market internals suggestive of a shift toward risk-averse preferences among investors. The resulting combination places current conditions among instances that we identify as a 'Who’s Who of Awful times to Invest'."
BANKS: "BofA's chief strategist says it's a 'better' company since the financial crisis," reports Charlotte Observer. Sure, major banks like BofA have grown 30% since 2009, but the bad news is that the U.S. economy, jobs and wages have not. Over the past six years there has been a shift of world global economic policies from production and stable economic indicators, to speculation and derivatives in an attempt to disguise the printing of money and bad fiscal policy. Read more in The Biggest Bank Heist In History!
FED/ZIRP: The Fed's belief that zero interest rate monetary policy (ZIRP) can achieve low inflation together with below-normal unemployment has lead to reckless policies that are doing considerable collateral damage. The U.S. Fed, Japan and now the EU all hope negative real returns will lead savers to save less and to spend more - which is the goal of negative interest rates. "How Far Below Zero Can Interest Rates Go?" asks WSJ. "People seem willing to tolerate credit card and related fees of around 2% ... people would tolerate negative interest rates of 3% before switching to cash. Peter Berezin of BCA Research notes that people have a psychological aversion to loss, and the prospect of losing money on a super-safe deposit or government bond may have a more powerful effect."
GOLD: Precious metal prices eased back on the dollar surge which sent oil prices below $50. Meanwhile the physical gold market may undergo a dramatic change in 10 days when the monopoly of the four London price fixing banks (London Gold Market Fixing Ltd.) will hand over the twice-daily fix to the International Commodity Exchange's (ICE) trading platform. Starting March 20, the London gold price will be no longer set through a private arrangement among the four members; Bank of Nova Scotia-ScotiaMocatta, Barclays Bank, HSBC Bank USA, and Societe Generale SA. Instead, the ICE will consist of 11 members, including several major Chinese banks. "By taking its seat at the gold-pricing table, China inadvertently will act as a proxy for gold coin and bullion owners all over the world," reports GATA.org. This may bring more transparency and stability to the gold market, attracting more value-oriented buyers.
3.9.15 - Banks At Risk From "Cyber 9-11"
Gold last traded at $1,166 an ounce. Silver at $15.77 an ounce.
STOCKS: Monday, absent any fresh economic news, U.S. stocks quietly celebrated the bull market's sixth birthday with the unveiling of Apple iWatch in the center ring. The S&P 500 hit a bottom on March 9, 2009 at 676 - after falling 50% from its peak in October 2007 - but in the six years since that low, it has more than tripled in value. However, over the last decade the S&P Index is up just 60%, or 6% per year. According to iWatch reader feedback at Marketwatch: "What a sad state of affairs we must be in if all we have to talk is about is the Apple watch, like there is nothing else going on in the world. It's a watch, not a life. It's a phone, not a life."
CYBER-THREAT: Cyber-threats have quickly become the number one threat in banking today, rising over 782% in the last six years. "Regulator warns of 'Armageddon' cyber attack on banks," reports USA Today. Financial regulators are considering new rules to protect against "an Armageddon-type" cyber attack that could devastate U.S. financial markets. Ben Lawsky, head of New York's Department of Financial Services (DFS), said he fears a large enough hack on Wall Street firms could "spill over into the broader economy" - not unlike the mortgage meltdown of 2008. He called such an attack a "cyber 9/11." Lawsky's warning of a cyber attack on Wall Street follows a recent report warning of a band of international cyber crooks (Carbanak) who infiltrated banks and stole over $1 billion from customers over a two year period. London's SC Magazine says, "The Carbanak cyber-raid is the largest bank heist ever conducted online by a single cyber-crime group." [Further reading: "The Biggest Bank Heist in History"]
BANKS: "How safe are you and your bank from cyber-attack?" asks The Guardian. What if a cyber-attack succeeds? You could be unable to access your bank account online or at any ATM. Both the HSBC and NatWest sites have been shut down by hackers in the past. The Bank of England’s executive director Andrew Gracie warns, "A successful attack on a bank today could not only result in the corruption or loss of data held in the bank's systems, but also a complete loss of systems, disrupting a firm’s capacity to operate."
DEBT: David Stockman, author of The Great Deformation says corporate America is cannibalizing itself with stock buybacks."The Fed's balance sheet has ballooned by 9 times since 2000, yet real net investment in the business sector has cratered by 33 percent during the same time period. Once upon a time businesses borrowed long-term money - if they borrowed at all - in order to fund plant, equipment and other long-lived productive assets," writes Stockman. Meanwhile, the Telegraph reports, "global indebtedness has reached its highest level in 200 years." The global public debt has grown by $27 trillion since the financial crisis gripped the world eight years ago, according to the McKinsey Global Institute.
GOLD: Precious metal prices steadied Monday amid a weaker U.S. dollar and higher oil prices. Speculators sold the yellow metal for five straight week as markets begin to price in the possibility of a Fed interest rate hike by September. Long-term accumulation of physical gold below $1,200 an ounce is recommended to achieve maximum wealth preservation as the stock, bond and dollar market bubbles continue searching for new pins. Reminder: The April 15th tax deadline is fast approaching. Don't miss out on some key benefits which may not be available to you next year. Call 800-289-2646 to speak with a Swiss America representative about a precious metals IRA today.
3.6.15 - When Good News Becomes Bad News
Gold last traded at $1,164 an ounce. Silver at $15.80 an ounce.
JOBS: U.S. nonfarm payroll jobs for February totaled 295,000 - about 50,000 above economists' consensus - which sent the unemployment rate to 5.5% (down from 5.7%). However, the average hourly wage remained stagnant, rising just 0.1%; much less than expected. Another weak economic point is the U.S. Labor Force Participation which has stubbornly hovered near a 37-year-low for 11 months now. This is not a robust recovery by any measure.
STOCKS: U.S. stock indexes fell over 1% following the upbeat jobs report. With such good jobs news today, why did stocks fall so sharply? What has investors so spooked? According to CNBC's Art Cashin of UBS, the markets are 'terrified' the Fed is boxing itself in. Investors fear the sooner interest rates begin rising, the sooner stock prices could be revalued lower. Meanwhile, Apple stock will finally join the Dow Jones Industrial index, to replace AT&T on March 18. Telegraph reports, "Apple will make up 4.66% of the Dow, but will not impact the value of the DJIA which is up 1.8% this year."
DEBT: The U.S. will hit its debt limit on March 16, according to Treasury Secretary Jack Lew, who is urging lawmakers to begin taking "extraordinary measures" to finance the government on a temporary basis. So we may again face a political battle to kick the debt can further down the road. Keep in mind it took the U.S. over 200 years to increase the federal debt from zero to $9 trillion. But just since 2007, U.S. debt has more than doubled from $9 trillion to over $18 trillion. Wise economists know this rate of debt increase is unsustainable.
FED: After February's surprisingly strong jobs report, the Fed is now more likely to signal an interest rate hike is near, perhaps as soon as June. It is amazing that in just eight short years Fed Chairs Bernanke and Yellen have presided over a debt creation of more than $9 trillion - which previously took the U.S. over 200 years to achieve! As the old saying goes, 'When your outgo exceeds your income, your upkeep becomes your downfall.'
GOLD: Precious metal prices fell over 2% Friday on the jobs news, while the dollar soared to 12-year highs and Treasury yields jumped up. Question: Has anything fundamentally changed in the economy or financial markets? Answer: No, just the public perception. Gold is still the world's most trustworthy asset, whether daily prices rise or fall. According to Matterhorn's Egon von Greyerz, "We are now in Wonderland, where anything is possible. Real money disappeared a long time ago and we have only fiat money that can be created out of nothing. And whatever needs governments have, they can just print more money to achieve it." Owning physical gold is one of the only assets that is not someone elses' liability!
3.5.15 - U.S. Jobs Recovery: Coming Soon?
Gold last traded at $1,196 an ounce. Silver at $16.16 an ounce.
STOCKS: U.S. stocks inched higher Thursday ahead of jobs data on Friday. Meanwhile, the European Central Bank announced they will kick off a trillion-dollar plan to purchase government bonds (Q.E.) next Monday. Richard Russell's Dow Theory Letter is issuing readers a new warning about exiting stocks and Marketwatch reports, "Tech bubble worse now than 15 years ago."
JOBS AND ECONOMY: The recession of 2009 has never ended in the jobs market. Economic uncertainty has stunted U.S. hiring for the last six years. In fact, companies big and small are planning layoffs; but why? Craig Smith explains why here in his latest appearance on Fox Business Network's Cavuto. "The economy has not turned around yet Neil," says Mr. Smith, author and Chairman of Swiss America. "Brick and mortar companies have some lessons to learn from Kmart, JCPenney, Sears and Radio Shack." Smith reminded Neil that major companies, like Target, have spent more than $2 trillion since 2009 on stock buybacks, pushing their stock prices up much faster than is healthy; given we are living in an economy only growing at 2%. Lower gas prices added $100 billion into the economy, yet even that has not boosted the economy much. Consumers are beginning to spend less and save more. Mr. Smith hopes the Obama administration will stay out of the way of a free market which knows how to grow jobs.
Also a factor, "Boomers Won't Budge," reports Marketwatch. Many older workers are holding on to their jobs instead of retiring - and that's causing a logjam in the labor market. Americans have either decided to remain in the workforce due to finances or because they like working, "and that has meant greater competition for jobs," says Mark Hamrick, Washington bureau chief at personal finance site Bankrate.com. Only 26% of Americans have a traditional notion of retirement in which they plan to stop working altogether, according to a new survey of 7,000 households released last week by The Pew Charitable Trusts.
BANKS: "Citigroup, Morgan Stanley, Merrill Lynch Received $6 Trillion Backdoor Bailout from Fed," reports WallStreetOnParade.com. The Senate Banking Committee held the first of its hearings on widespread demands to reform the Federal Reserve to make it more transparent and accountable. Their is a growing public outrage over how the Federal Reserve conducts much of its operations in secret and appears to frequently succumb to the desires of Wall Street to the detriment of the public interest. Nearly all the money went to too-big-to-fail institutions. For example, in one emergency lending program, the Fed put out $9 trillion and over two-thirds of the money went to just three institutions: Citigroup, Morgan Stanley and Merrill Lynch.
GOLD: Precious metal prices steadied near $1,200 (gold) and $16.20 (silver). Such a deal! Despite lower gold prices, Sprott Asset Management’s Rick Rule tells Kitco he isn’t disappointed with the yellow metal. "I've seen a room at Motel 6 where an ounce of gold would by you 6 nights, and now an ounce of gold buys you 16 nights. That's what gold is supposed to do," he says. "For people like me, gold hasn't disappointed at all." Rule adds that he sees gold as a good store of value.
3.4.15 - Markets Adrift Need A Golden Anchor
Gold last traded at $1,200 an ounce. Silver at $16.16 an ounce.
STOCKS: U.S. stock indexes sunk on Wednesday following disappointing ADP jobs data showing just 212,000 private sector jobs added last week. Traders and investors will focus on Friday's U.S. jobs report. Meanwhile, Target announced they will cut 26,000 jobs in Minneapolis and India to trim costs by $2 billion. [NOTE: Swiss America Chairman Craig Smith will be discussing the Target job cuts and the trend of brick and mortar stores toward online sales on Fox News with Neil Cavuto tonight at 8:50pm ET.]
FED: Fed Chair Janet Yellen fretted over the weak recovery starting in 2009, according to WSJ. After six years of experimenting with zero interest rate policy (ZIRP) she is still worried, as we all should be. The Fed knows they have now fostered bubbles in stocks, bonds and the dollar. What they don't know is how to escape without causing a painful market revaluation. Discover the only four choices the Fed has to exit in our new White Paper, The Biggest Bank Heist In History.
BANKS: "Poor Values May Undermine Bank Safety," according to CNBC. Fed Chair Janet Yellen lashed out at the culture in the nation's biggest banks on Tuesday saying, "there may be pervasive shortcomings in the values of large financial firms that might undermine their safety and soundness." Yellen also said that banks' so-called resolution plans still had shortcomings. By "poor values," Yellen is referring to charges of market manipulation of interest rates (libor), sub-prime lending practices and precious metal price suppression - all of which have been practiced by the Fed for many, many years! Talk about the Fed pot calling the bank kettles black!
CYBER-THREATS: Is your Fridge Spying on You? Technology companies have a financial agenda to tie us all to an "Internet of Things" (IoT). Beware of the loss of privacy modern conveniences may include. Meanwhile, The Fiscal Times warns, "Your Next Flight Could Be Hit By a Cyber Attack." "The National Airspace System is vulnerable to cyber attacks," says the GAO, "and the Federal Aviation Administration has not done enough to address the weaknesses." The GAO also faulted the agency for not properly training its cyber security workers to respond in the event of a breach. It said some workers may not recognize and respond appropriately to potential security threats and vulnerabilities.
GOLD: Precious metal prices dipped as the U.S. dollar index posted an 11.5-year high. In today's uncertain economic environment, investing your hard-earned wealth without a proper plan for diversification is like trying to build your dream home without a blueprint. More and more, savvy investors are including hard assets in their retirement plans to provide a balance for their paper investments. It is vital to diversify retirement investments in this way to both safeguard and grow wealth in a variety of financial market conditions. Every portfolio needs a golden anchor to withstand the storms of life. Call (800) 289-2646 to discuss establishing or rolling over an existing retirement plan or IRA into precious metals.
3.3.15 - Statesmen vs. Politicians
Gold last traded at $1,204 an ounce. Silver at $16.29 an ounce.
WASHINGTON D.C.: Today Israeli Prime Minister Benjamin Netanyahu asked the U.S. Congress (minus about 50 Democrats) to block a proposed new Iran nuclear pact. Mr. Netanyahu's speech brought thunderous applause and ten standing ovations, as he boldly declared the principles that bind a free world together, such as "life, liberty and the pursuit of happiness". He contrasted the U.S. founding documents with Iran's, which pledge "death, tyranny, and the pursuit of jihad." He offered hope saying, "the days when Jewish people remain passive in the face of genocidal aggression are over".
In response, President Barack Obama (not in attendance) said Netanyahu didn't offer any "viable alternatives" to the nuclear negotiations with Iran and that Netanyahu's three simple behavioral requirements for Iran; 1.) Stop aggression with Mid-East neighbors, 2) Stop supporting terrorism and 3) Stop threatening to annihilate Israel, would "amount to no deal at all."
"The reason Obama has it out for Netanyahu may be more terrifying than you thought possible," reports Western Journalism. Author Lowell Ponte opines, "Iran’s rulers are building missiles capable of delivering nuclear warheads onto the cities of Israel, Europe, and the United States. The next 9-11-like terrorist attack could vaporize Washington and New York City beneath mushroom-shaped clouds - killing millions, replacing our freedom with garrison states, and crashing our economy."
STOCKS: U.S. stocks pulled back Tuesday, retreating from all-time highs and the psychologically significant 5,000 level for the Nasdaq reached during the previous session. Meanwhile, Bloomberg reports, "Companies in the S&P 500 have spent more than $2 trillion on their own stock since 2009, underpinning an equity rally in which the index has more than tripled."
FED: "Are markets ready for June rate hike?" asks CNBC. BlackRock bond investor Rick Rieder and prominent hedge fund managers Jamie Dinan and Kyle Bass think Yellen's Fed will finally increase the cost of borrowing money in June. "I think when she moves, it's going to cause a problem," Bass said. " I think it's going to be turbulent but it's going to be healthy. In other words, we've got to stop this aggressive monetary stimulus," Dinan said.
GOLD: Gold prices zig-zagged up and down Tuesday on a weaker dollar, holding above the $1,200 an ounce level. Precious metal expert David Morgan sees good times ahead for silver in 2015, telling Kitco, "I think we're going to be able to get to the $26 level by this fall". Morgan is also optimistic about gold prices, expecting $1,550 an ounce gold by October, 25% higher than current levels.
3.2.15 - Wake up and smell the danger!
Gold last traded at $1,208 an ounce. Silver at $16.41 an ounce.
STOCKS: U.S. stocks rallied Monday as the Nasdaq index hit 5,000 for first time in 15 years. But many market analysts believe the U.S. stock market is at its most overvalued level in history. Smarter Analyst reports, "The notion that the stock market is cheap certainly makes no sense. The opposite is actually the case, and the wide dispersion of overvaluation makes the market potentially even more dangerous than it was during previous asset bubbles."
FED: "A Financial System Still Dangerously Vulnerable to a Panic," reports WSJ. The authors argue, "The Federal Reserve’s powers need to strengthened." Like most progressive economic advisors, they envision a Fed unfettered by the Legislative Branch - empowered to help save the economy with more and more money creation. They view the Fed as the 4th Branch of Government. This WSJ article fails to mention the central bankers and the Wilsonian Progressives who created the Fed have slowly but surely shrunken the value of the U.S. dollar (and our labor) by 97% in the last century.
BANKS: "Banker bashing wins votes but real culprits go unpunished," reports Telegraph. As former New York Attorney General Eliot Spitzer once said, "Bankers make the guys on Wall Street look good." Meanwhile, CNBC reports, "Ultra-easy central bank monetary policies are about to come back to bite the global economy," says bond guru Bill Gross. "The financial repression that goes along with easy-money policies is doing harm and the financial system has become increasingly vulnerable only six years after its last collapse in 2009," said Gross. DON'T BANK ON IT! authors Craig Smith and Lowell Ponte have been sounding this message for years. Are you prepared when the Fed policies "bite"?
WASH. DC: Israeli Prime Minister Benjamin Netanyahu is expected tell Congress Tuesday that the agreement taking shape with Iran will leave them with the ability to pursue the development of nuclear weapons. NBC reports, "Prime Minister Benjamin Netanyahu of Israel said Monday that he meant no disrespect to President Barack Obama by accepting an invitation to speak to Congress." Legendary entertainer, and Swiss America spokesperson, Pat Boone will attending Mr. Netanyahu's speech to Congress Tuesday at 11am ET.
GOLD: Precious metal prices dipped Monday amid technical selling and a firmer U.S. dollar. Don't wait another day to buy gold at bargain prices.